Insurance and Private Pensions Sector in Turkey. 5 October 2017

Transcription

1 Insurance and Private Pensions Sector in Turkey 5 October

2 AGENDA i. Turkish Insurance Market: An Overview ii. Hot Topics iii. Importance of the Insurance Sector for the economy & it s Prospects iv. Potential of the Insurance Sector and the Opportunities v.conclusion 2

3 i. Turkish Insurance Market: An Overview 3

4 Main Indicators Total Assets: 138 Billion TL Premium Production: 2016: 40,5 BillionTL 2017/8: 29,7 BillionTL Pension: Pension Funds: 72,8 BillionTL Number of Companies: 63 Non-life: 39 Pension and Life: 22 Reinsurance: 2 Number of Participants: 6,8 Million 4

5 Premium Production ( ) Million TL Hayat Hayat Dışı %30,

6 Premium Production 2017/8 MillionTL /8 2017/8 Non life Life 6

7 Breakdown of Insurance Premiums by Branches, (2016) LIFE 12,4% ACCIDENT 3,5% SICKNESS/HEALTH 10,4% LAND VEHICLES 15,2% MTPL 31,9% FIRE & NATCAT 11,9% OTHERS 5,8% GENERAL DAMAGES 8,6% 7

8 Loss Ratio by Branches (2017/Q2) LOSS RATIO (%) GROSS LOSS RATIO (%)

9 Profitability (2017/Q2) Non-life Branches Life Branches Private Pension Total Technical Profit Net Profit 1,3 billion TL 606 million TL 110 million TL 2 billion TL 1,9 billion TL 9

10 ii. Hot Topic: MTPL 10

11 Loss in MTPL Since 2006 total amount of loss: 7,3 billion TL Traffic Non-life

12 Ceiling Tariff and pool took into effect Total Premium (Million TL) Number of Policy (Million) ,0 9,0 8,0 7,0 6,0 8,2 8, ,0 4, , ,0 1, /6 2017/6 0,0 2016/6 2017/6 12

13 Tariff System Estimated Loss Estimated Loss Ratio 2,3 Billion TL %

14 MTPL/Realistic Solution; MTPL Action Plan 1. Decreasing Traffic Accidents 2. Action for the Tariff system 3. Action for the Regulation 4. Action for the Court system 14

15 II. Agenda MTPL Action Plan 1. Decreasing Traffic Accidents 15

16 1. Decreasing Traffic Accidents: High claim frequency EU-Turkey Claims Frequency (2014) 10% 9% %9 8% 7% 6% %5,9 5% 4% 3% 2% 1% 0% Turkey EU Kaynak: European Motor Insurance Markets Addendum,

17 1. Decreasing Traffic Accidents: High claim frequency EU vs. Turkey: Fatality in the accidents per 100 thousand people Number of people killed in the traffic accidents 9 4 Turkey EU Source: IRTAT,

18 Decreasing Traffic Accidents: traffic monsters 32.2 thousand Drivers 110 thousand Accident *: In the same period, the number of accidents incurred by the those who caused 3 and more accident in the preceeding 365 day-period 18

19 Decreasing Traffic Accidents We have taken initiative with all the stakeholders relating to the road safety in order to significantly reduce the number of traffic accidents 19

20 II. Agenda MTPL Action Plan 2. Tariff System 20

21 2-Action for the Tariff system Implementing Free Tarrif for the vehicles outside of the MTPL pool Revising Premium level based on UW year basis for the MTPL Pool Declining share of Social Security Institution on the MTPL premium 21

22 II. Agenda MTPL Action Plan 3. Regulation 22

23 3- Action for the Regulation General Conditions of MTPL studies going on Considering the current situation on MTPL Must not any regulation which burden new cost to the Industry Supporting equivalent parts /OSEM Loss in Value ProblemP Proe 23

24 3 Problem relating to loss in value %95 of claims files are about traffic and %75 of them are related to losss in value % TL Arbitration Fee Arbitrator Fee 100 TL 350 TL TL Average cost of demands made for loss in value 3.385TL Loss in value calculated by arbitration The overall cost of loss in value by arbitration Expert Fee Legal Expenses Total 330 TL 1800 TL 2580 TL *Includes expenses for experts and legal expense 24

25 II. Agenda MTPL Action Plan 4. Cooperation with the Court System 25

26 Cooperation with the Court System Working to ensure that court decisions are in compliance with the regulation Decisions taken in compliance with the regulation Decisions taken not in compliance with the regualtion Courts Arbitration Total

27 Cooperation with the Court System: Courts & Arbitration Cooperation with the Courts Memorandum of Understanding with the Turkish Justice Academy 8-10th November 2017 Workshop with the Turkish Justice Academy 1-2nd December 2017 Workshop with participation of the Members of the Supreme Court of Appeals 19-20th January 2018 Workshop with the members of Regional Courts Cooperation with Arbitration 88% of the arbitration makes decisions against the insurance companies 27

28 ii. Hot Topic: Malpractise 28

29 Malpractise Loss ratio is % 240 for the 2016 Hard to get reassurance Tarrif level did not changed since 2010 İncreasing Premium level Limitation for the non-pecuniary indemnity demands(%15 of total indemnity) 29

30 ii. Hot Topic: Auto-enrolment 30

31 Pension System Auto enrollment 3.3 Million participant; 1.2 Billion TL Fund; %55 opt-out rate Revision is on the Agenda: Effective Communication is important. How and for how long? Support by the Government(Public broadcast) Employer Contribution is necessary Bonus system should be revised Third Pillar: Under the 18 age 31

32 iii. Importance of the Insurance Sector for the economy & it s Prospects 32

33 Creating Employment direct employee Over

34 Attracting Foreign Capital Share of foreign capital in total paid-up capital 71% 8 Billion USD Capital Source: Undersecretariat of Treasury, ınsurance and Private Pension Report

35 Providing Coverage for the Economy Büyük Yatırım Projeleri 35 times of GDP, 90 trillion TL (30 trillion USD) Kaynak: Undersecretariat of Treasury, Insurance and Private Pension Report

36 Payment for the the Losses (2016/Q2) 2016 Incurred Loss 2,4 2017/Q2 Incurred Loss 1,3 23,4 Billion TL 21 billion TL 13,3 Billion TL 12 billion TL Life Non-life Life Non-life 36

37 Incurred Loss in Credit Life Insurance In Credit Life Insurance; (September) Insureds Incurred Loss 1,1 Billion TL 800 Million TL 37

38 Paid Claims Second Quarter of 2017, 6,4 million claim files Per day files 71,7 million TL claims 38

39 Social Solidarity: Paid Claims 173 Million TL 3 Billion TL

40 Providing Funds billion TL (2017/Q2) Other 2,8 T-bills & Gov. Bonds 41,1 Bank Account 37,6 114,2 Billion TL Capital Market 23,6 Corporate Bonds 9,1 Kaynak: SPK

41 iv. Potential of the Insurance Sector and the Opportunities 41

42 Prospects for Growth 2016 Premium Production/GDP (%) 2016 Insurance Density ($) 8,0 7,0 6, , , , ,0 5,0 4,0 3,0 2,0 1,0 0,0 4,0 2,7 Europe Non-life Life 1,6 1,4 Turkey 0, , ,0 800,0 600,0 400,0 200,0 0, Europe Non-life Life Turkey 21 Source:Sigma No3/

43 Importance of Private Pension Funds in the Economy ,6 Private Pension Funds/GNP of OECD Countries (%) Source: OECD 0 Weighted Average of OECD 2,1 Turkey 43

44 Banking vs. Insurance 350% Assets/GDP (%) In 2016; 300% 291% 250% 200% Economy of Turkey is 17th economy in the world 150% 100% 62,2% 105% 50% 0% EU Banking Sector 4,7% Turkey Insurance Sector Turkish Insurance Industry s ranking: 36 in the world Source: TCMB, IMF, Sigma, TBB,

45 Banking vs. Insurance 350% 300% Assets ,6 trillion Share in Financial Sector 250% 200% 150% 100% 50% 0% 123 billion 87% 4.1% Bankacılık Banking Sector Sektörü Sigorta Insurance Sektörü Sector 45

46 v.the Bottomline is.. Mehmet Akif Eroğlu Secretary General Turkish Insurance Association 46

47 The Bottomline is.. Turkish economy presents opportunities for local and international insurance companies thanks to its dynamics and solid legislative infrastructure 47

48 Premium Production by Distribution Channel (2017/8) Non-life Broker 12,1% Other 1,6% Center 5,5% Life Broker 4,83% Center 7,69% Agency 5,28% Bank 15,2% Agency 65,7% Bank 82,20% 48

49 Premium Production by Agency (2017/8) OTHER 18% HEALTH-ILLNESS 10% FIRE & NATCAT. 10% KARA ARAÇLARI 22% MTPL 40% 49

50 Demographic Structure Fırsat Sunan Demografik Yapı / İletişime Açık Genç PopulationNüfus 79,8 million Urban Population 92,3% Age ,7% Age % Age 65+ 8,3% Average 31,4 Ratio of Internet Usage 66,8% Ratio of Social Network Usage 60% Ratio of Cell-phone Usage 98,5% Ratio of Smartphone Usage 84% Source: TUIK (2016), Ministry of Customs and Trade (2017) 50

51 Opportunities: Penetration rate Every 3 house out of 4 lack household insurance Half of the companies don t have fire insurance Every 2 vehicle out of 3 Lack land vehicle insurance Half of the houses don t have TCIP insurance 51

52 Pazarlamaya Yönelik Fırsatlar Digital distribution channels in insurance business have become critical especially reaching to younger generations Providing tailor-made insurance product for customer needs and Focus on the customer satisfaction The Bottomline is.. would contribute to increase the insurance penetration in Turkey. 52

53 Turkish Insurance Association Efforts Strategy Committies Distribution Channel Committee Communication &Public Relations Insurance Education from the very beginning 53

54 Thank you very much for your patience. Mehmet Akif Eroğlu Secretary General Turkish Insurance Association 54